REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

SECOND JUDICIAL REGION
BRANCH ____, CAUAYAN CITY

SPS. EDUARDO P. GACULA

AND JOSEFA B. GACULA,
Plaintiffs,

-versus- CIVIL CASE NO. _________

For: Declaration of Nullity
of
Foreclosure of Mortgage
and
Certificate of Sale, etc.

DEVELOPMENT BANK OF
THE PHILIPPINES (HEAD
OFFICE AND ILAGAN
BRANCH), REGISTRY OF
DEEDS FOR ISABELA,
NOTARY PUBLIC
FRANCISCO MARALLAG,
Defendants.
x----------------------------------------------------x

COMPLAINT

Plaintiffs, through counsel, respectfully state:

1) Plaintiffs Spouses Eduardo P. Gacula and Josefa

Bartolome Gacula are residents of No. 229, Rizal St.,

Calaocan, Isabela. Plaintiffs are represented in this case

by the undersigned counsel and may be served with

legal and court processes through the latter’s address

as stated below.
2) Defendant Development Bank of the Philippines (“DBP”)

is a financial institution with branch office address in

Ilagan, Isabela and head office address at Sen. Gil Puyat

Ave. corner Makati Avenue, Makati City. DBP may be

served with legal and court processes through any of

addresses given above.

3) Defendant Registry of Deeds for Isabela (the “RD”) is

the repository of, among others, land titles in the

province of Isabela, with office address at the Provincial

Capitol, Ilagan, Isabela. The RD may be served with

legal and court processes through the address given

above.

4) Defendant Notary Public Francisco Marallag of Ilagan,

Isabela (the “Notary Public”), handled the foreclosure of

the Property in 1991. The Notary Public may be served

with legal and court processes in his office in Ilagan,

Isabela.

5) Plaintiffs are the owners of an agricultural land with an

area of thirty-one thousand seven hundred thirty seven

(31,737) square meters situated in Bgry. Salvacion,

Alicia, Isabela and previously covered by Transfer

Certificate of Title No. T-48796 (“TCT No. 48796”) 1 duly-

1
ANNEX A, Certified True Copy of Transfer Certificate of Title No. T-48796 registered in the name
of Josefa Bartolome, married to Eduardo Gacula

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 issued by the Registry of Deeds of Isabela, which land is

more particularly described and quoted from TCT No.

48796 as follows (the “Property”):

“A PARCEL OF LAND (Lot D, of the subdivision plan LRC

Psd-121628, being a portion of the land described on
plan H-217548, LRC Rec. No. H. Pat.), situated in the
Barrio of Salvacion, Municipality of Alicia, Province of
Isabela. Bounded on the NE., points 5-6 by
Ambrosio Simon; on the NE., points 6-7 by Lot C;
points 7-8 by Lot B, of the subdivision plan; on
the SE., points 8-1 by Victorio Respicio; points 1-
4 by Macario Andaya; and on the W., points 4-5
by Lot E, of the subdivision plan. Beginning at a
point marked “1” on plan, being N. 15-42’E.,
5518.38m. from MBM Echague Cadastre, thence
S.84-03’W., 200.02m. to point 2; S.83-44’W.,
200.67m to point 3;
S.83-56’W., 124.32m. to point 4; N. 2-53’E.,
152.93m to point 5;
S.55-11’E., 124.64m. to point 6; N.89-55’E.,
238.01m to point 7;
S.89-54’E., 179.32m. to point 8; S.11-21’W.,
27.00m to point of beginning. Containing an area of
THIRTY ONE THOUSAND SEVEN HUNDRED THIRTY
SEVEN (31,737) SQUARE METRS, more or less. All
points referred to are indicated on the plan and
are marked on the ground as follows: Points 1-3
& 6 by Old BL and the rest by PS All Cyl. Conc.
Mons., 15x-60cms.; bearings true; Decl, 0 deg.
55’E.; Date of Original Survey, May 22, 1946 and
that of the Subdivision Survey, Feb. 12, 1970.”

Emphasis ours.

6) On March 3, 1977, Plaintiffs executed a real estate

mortgage (the “Mortgage”) on the Property in favor of

DBP to secure a loan in the amount of Pesos: Thirty-

nine thousand five (P39,500.00), Philippine currency,

(the “Loan”).

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7) Plaintiffs were not furnished with a copy of the

Mortgage and the Loan documents which are all in the

possession of DBP. However, the Mortgage was

registered or annotated on the dorsal portion of TCT No.

48796 as Entry No. 28292.

8) Thereafter, without proper and due demand to pay the

Loan and worse, without proper and due notice to the

Plaintiffs, the Property was allegedly foreclosed and

sold at public auction on September 9, 1991 in favor of

DBP. This is evidenced by the Certificate of Sale 3 on file

with the RD and registered or annotated on the dorsal

portion of TCT No. 48796 as Entry No. 4311. Curiously,

the purported Certificate of Sale was registered with the

RD only on October 6, 2010.

9) In particular, the Certificate of Sale as well as the Notice

of Sale which was the basis for the Certificate of Sale

incompletely and erroneously described the Property as

follows:

“TRANSFER CERTIFICATE OF TITLE NO. T-48796 –

ISABELA

A parcel of land (Lot D of the subdv. Plan (LRC) Psd-

321628, being a portion of the land described on
plan H-217548, LRC Rec. No. H. Pat.), situated at
Salvacion, Alicia, Isabela, containing an area of

2
Please see Entry No. 2829 on dorsal portion of TCT No. 48796
3
ANNEX B, Certificate of Sale

4
 31,737 SQUARE METERS, more or less with
improvements thereon. Bounded on the NE., by
property of Ambrocio Simon; on the NE., by Lot
C and Lot B; on the SE., by property of Victoria
Respicio; and Macario M. Andaya; and on the
W., by Lot E. Covered by T/D No. A-3468, assessed
at P4,870.00.”

Emphasis ours.

10) Notwithstanding the obvious incomplete and erroneous

description of the Property in the Certificate of Sale and

Notice of Sale which actually rendered the foreclosure

null and void, Plaintiffs, through counsel, still offered in

utmost good faith to just purchase back the Property

through their letter, dated October 1, 2011 4. The letter

reads:

October 1, 2011

Development Bank of the Philippines

Makati City

Attention: Mr. Francisco Del Rosario

President

Re: Account of Sps. Eduardo P. Gacula and Josefa B.

Gacula
re: Agricultural Land located in Bgy. Salvacion, Alicia, Isabela
(the “Property”)

Sir/Madam:

We write in behalf of our clients, Sps. Eduardo P. Gacula and

Josefa B. Gacula, relative to the Property.

Our clients were informed about the supposed foreclosure of the

Property although they are unaware of the circumstances that led to
the said foreclosure including compliance to the pertinent
requirements and procedures under the law.

However, we were informed by our clients – who are both

retired government workers – of their sincere intention to settle the
loan on the Property with the help of their children and relatives.
Please note that our clients now rely primarily on the agricultural
produce from the Property although the recent heavy typhoons that hit
and continue to hit hard the province have indeed practically drained
their retirement savings. Our clients’ predicament is even aggravated

4
ANNEX C, Letter dated October 1, 2011

5
 by the recent strong typhoons – Pedring and Quiel - that directly hit the
province of Isabela.

Our clients wish to offer the amount of Pesos: Two Hundred Fifty
Thousand (P250,000.00) for the settlement of their loan through
twenty five (25) equal monthly amortizations or the amount of
P10,000.00 per month. They are confident they can raise the said
amount monthly through the help of their children and relatives and at
the same time sustain, at least, their decent living.

We trust your good office would take note of our clients’

predicament and hope their offer would merit your kind consideration
and approval.

Thank you and best regards.

Very truly yours,

Basilio C. Almazan,
Jr.
For the Firm

cc:

Ms. Lourdes Anne E. Liao

Senior Asst. Vice President

11) However, in their letter, dated October 7, 2011 5, which

they sent through registered mail DBP simply replied,

among others, as follows:

“Please be informed that we are constrained

to act on the offer, being way below the
Bank’s P804,210.49 total claim (as of
attached October 6, 2011 statement).
Likewise, it shall be noted that validity of the
redemption period for the DBP-foreclosed
property covered by TCT No. T-48796 has of
late expired on October 6, 2011, triggering
hence title consolidation in the Bank’s name
for proper disposal thereof.

Altogether and consistent with Bank policy on

acquired asset disposal, the property shall
first be offered in a public bidding on cash
basis, for which a minimum price is
established, and thereafter published in two
(2) leading broadsheets on nationwide
circulation. We shall be set to render due
notice of the public bidding schedule once
finalized.”
5
ANNEX D, letter dated October 6, 2011 from DBP

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12) Plaintiffs were terribly shocked with DBP’s letter and

were completely at a loss at how their P39,500.00 loan

ballooned to P804,210.49.

13) On September 21, 2012, DBP published in the

Philippine Star and Philippine Daily Inquirer an Invitation

to Bid6 for various properties including the Property, the

bidding for which Property was scheduled on October 5,

2012. It was then that Plaintiffs found that the Property

is now registered in the name of DBP under TCT No. T-

398938.

14) Hence, this action.

CAUSES OF ACTION

15) Plaintiffs replead and reproduce the foregoing

averments insofar as they may be material and

relevant.

16) The foreclosure of the Property and Certificate of Sale

should be declared a nullity.

17) Firstly, it bears stressing that Plaintiffs never actually

received any demand from DBP for the payment of the

Loan. Hence, this want of demand readily renders the

6
ANNEX E, Invitation to Bid by DBP

7
 foreclosure premature. In fact, there is strong need for

this Honorable Court to order DBP to render an

accounting and explain why and how Plaintiffs’

P39,500.00 loan suddenly ballooned to an utterly

obscene amount of P804,210.49.

18) Secondly, Plaintiffs never knew and never actually

received the purported Notice of Sale involving their

Property. In fact, to date, Plaintiffs have not received

any copy of the said Notice of Sale and their attempts

to secure a copy of the said Notice of Sale and/or

Affidavit of Publication from the RD and/or the Regional

Trial Court of Ilagan and Regional Trial Court of Cauayan

have been unsuccessful and rendered futile.

19) More, the incomplete and erroneous description of the

Property in the Certificate of Sale and purported Notice

of Sale the contents of which were the basis for the

Certificate of Sale, actually rendered the foreclosure

null and void.

20) In the case of Cesar San Jose and Margarita

Batongbakal vs. Court of Appeals, et al., G.R. No.

106953, August 19, 1993, the Honorable Supreme

Court held:

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“The provision of Act No. 3135 as amended by Act
No. 4118 relevant to the issues in this case is
Section 3 which states:

Sec. 3. Notice shall be given by posting notices of

sale for not less that twenty (20) days in at least
three public places of the municipality or city
where the property is situated, and if such
property is worth more than four hundred pesos,
such notice shall also be published once a week
for at least three consecutive weeks in a
newspaper of general circulation in the
municipality or city.

In Tambunting v. Court of Appeals, the Court

stressed that the statutory provisions
governing publication of notice of mortgage
foreclosure sales must be strictly complied
with, and that even the slightest deviations
therefrom will invalidate the notice. In the
case at bar, the Notice of Sheriff's sale referred to
the property covered by TCT No. T-169705. This
was the notice actually published in "The New
Record" as shown by the Affidavit of Publication
executed by the Business Manager of the
aforementioned publication. The trial court and the
Court of Appeals upheld the validity of the Notice
based on the theory that although the property to
be sold pursuant to the foreclosure of mortgage
was indeed covered by TCT No. T-159703 and not
by TCT No.
T-169705, the technical description, however, in
the notice was the actual and correct technical
description of the property. Both the trial court and
the Court of Appeals held that the discrepancy in
the title number was "purely a typographical error"
which "did not render null and void the public
auction sale held by the Sheriff. The number of the
transfer certificate as an identification of real
property is not controlling. What controls is the
technical description."

We disagree and consequently we reverse the

decision of the Court of Appeals.

In the Tambunting case, this Court stated that the

failure to advertise a mortgage foreclosure
sale in compliance with statutory
requirements constitutes a jurisdictional

9
defect invalidating the sale and that a
substantial error or omission in a notice of
sale will render the notice insufficient and
vitiate the sale.

The notice of Sheriff's Sale, in this case, did not

state the correct number of the transfer certificate
of title of the property to be sold. This is a
substantial and fatal error which resulted in
invalidating the entire Notice. That the correct
technical description appeared on the Notice does
not constitute substantial compliance with the
statutory requirements. The purpose of the
publication of the Notice of Sheriff's Sale is to
inform all interested parties of the date, time and
place of the foreclosure sale of the real property
subject thereof. Logically, this not only requires
that the correct date, time and place of the
foreclosure sale appear in the notice but also that
any and all interested parties be able to determine
that what is about to be sold at the foreclosure
sale is the real property in which they have an
interest.

The Court is not unaware of the fact that the

majority of the population do not have the
necessary knowledge to be able to understand the
technical descriptions in certificates of title. It is to
be noted and stressed that the Notice is not meant
only for individuals with the training to understand
technical descriptions of property but also for the
layman with an interest in the property to be sold,
who normally relies on the number of the
certificate of title. To hold that the publication of
the correct technical description, with an incorrect
title number, of the property to be sold constitutes
substantial compliance would certainly defeat the
purpose of the Notice. This is not to say that a
correct statement of the title number but
with an incorrect technical description in the
notice of sale constitutes a valid notice of
sale. The Notice of Sheriff's Sale, to be valid,
must contain the correct title number and
the correct technical description of the
property to be sold.

Emphasis ours.

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21) In particular, the utterly erroneous description of the

Property in the Certificate of Sale and Notice of Sale as

Lot D of the subdv. Plan (LRC) Psd-321628 instead

of Lot D, of the subdivision plan LRC Psd-121628

renders the foreclosure null and void.

22) Equally telling is the procedural shortcut committed

made in the Certificate of Sale and Notice of Sale which

merely described the Property as -

“TRANSFER CERTIFICATE OF TITLE NO. T-48796 –

ISABELA

A parcel of land (Lot D of the subdv. Plan (LRC) Psd-

321628, being a portion of the land described on plan
H-217548, LRC Rec. No. H. Pat.), situated at Salvacion,
Alicia, Isabela, containing an area of 31,737 SQUARE
METERS, more or less with improvements thereon.
Bounded on the NE., by property of Ambrocio
Simon; on the NE., by Lot C and Lot B; on the SE.,
by property of Victoria Respicio; and Macario M.
Andaya; and on the W., by Lot E. Covered by T/D
No. A-3468, assessed at P4,870.00.”

instead of -

“A PARCEL OF LAND (Lot D, of the subdivision plan LRC

Psd-121628, being a portion of the land described on
plan H-217548, LRC Rec. No. H. Pat.), situated in the
Barrio of Salvacion, Municipality of Alicia, Province of
Isabela. Bounded on the NE., points 5-6 by
Ambrosio Simon; on the NE., points 6-7 by Lot C;
points 7-8 by Lot B, of the subdivision plan; on
the SE., points 8-1 by Victorio Respicio; points 1-
4 by Macario Andaya; and on the W., points 4-5
by Lot E, of the subdivision plan. Beginning at a
point marked “1” on plan, being N. 15-42’E.,
5518.38m. from MBM Echague Cadastre, thence

11
 S.84-03’W., 200.02m. to point 2; S.83-44’W.,
200.67m to point 3;
S.83-56’W., 124.32m. to point 4; N. 2-53’E.,
152.93m to point 5;
S.55-11’E., 124.64m. to point 6; N.89-55’E.,
238.01m to point 7;
S.89-54’E., 179.32m. to point 8; S.11-21’W.,
27.00m to point of beginning. Containing an area of
THIRTY ONE THOUSAND SEVEN HUNDRED THIRTY
SEVEN (31,737) SQUARE METRS, more or less. All
points referred to are indicated on the plan and
are marked on the ground as follows: Points 1-3
& 6 by Old BL and the rest by PS All Cyl. Conc.
Mons., 15x-60cms.; bearings true; Decl, 0 deg.
55’E.; Date of Original Survey, May 22, 1946 and
that of the Subdivision Survey, Feb. 12, 1970.”

23) In fact, even assuming for the sake of argument that

there was due compliance with foreclosure proceedings,

it should be stressed further that the incomplete and

erroneous description of the Property in the Certificate

of Sale render the registration of the said Certificate of

Sale defective and thus void.

24) Accordingly, due to the defective registration of the

Certificate of Sale which rendered it void, Plaintiffs’

right to redeem is deemed to have not even started as

of date.

25) As a result of the foreclosure of the Property which has

a market value of P836,620.00 per tax declaration,

Plaintiffs suffered and continue to suffer actual

damages in the amount of P100,000.00, exclusive of

interest, penalties, costs and 20% attorney’s fees.

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26) Due to the foreclosure of the Property, Plaintiffs

experienced sleepless nights and besmirched

reputation for which DBP should be order to pay moral

damages in the amount of P 50,000.00.

27) To set an example for the public good and to serve as

deterrent to the commission of similar acts by DBP, DBP

should be sentenced to pay exemplary damages in the

amount of P 50,000.00.

28) Further, Plaintiffs were constrained to engage the

services of counsel to enforce its rights. Hence, they

should be reimbursed for the amount of P 50,000.00 as

and by way of attorney’s fees plus P 5,000.00

appearance fees for every hearing, and 20% of the

amount being collected.

ALLEGATIONS IN SUPPORT OF PLAINTIFFS’

PRAYER FOR TEMPORARY RESTRAINNG ORDER
AND/OR PRELIMINARY INJUNCTION

29) Plaintiffs further replead the foregoing averments

insofar as they may be relevant and material

hereunder.

30) Notwithstanding the want of legal demand by DBP to

Plaintiffs for the payment of the Loan and the clear and

13
 absolute nullity of the foreclosure sale of Plaintiffs’

Property and of the Certificate of Sale, coupled with the

fact that Plaintiffs even offered to redeem the Property

in good faith, DBP has been unlawfully disposing the

Property as shown by the Invitation to Bid it published

and bidding it scheduled on October 5, 2012.

31) DBP is now actually performing acts in violation of the

rights and prejudicial to the interest of Plaintiffs.

32) Plaintiffs are entitled to the relief demanded, and the

whole or part of such relief consists in restraining the

commission and/or the continuance of the acts

complained of.

33) The commission and/or the continuance of the acts

complained of during the litigation would certainly work

injustice to the Plaintiffs.

34) DBP is doing, or are attempting to do, or are procuring

or suffering to be done, some acts probably, if not

certainly, in violation of the rights of Plaintiffs

respecting the subject of the action or proceeding, and

tending to render the judgment ineffectual.

35) Plaintiffs are able and willing to execute or post a bond

in favor of DBP or any party restrained/enjoined in an

14
 amount to be fixed by this Honorable Court for the

issuance of the writ of preliminary injunction and/or

temporary restraining order. The bond shall be

conditioned to pay DBP or any party

restrained/enjoined, all damages that they may sustain

by reason of the injunction and/or restraining order,

should this Honorable Court finally decide that the

Plaintiffs are not entitled thereto.

36) As to each items of the relief to be granted, great injury

will be inflicted upon the herein Plaintiffs by the denial

of the writ of preliminary injunction and/or temporary

restraining order than will be inflicted upon DBP by the

granting thereof.

37) In view of the extreme urgency of the matter as the

Plaintiff will suffer grave injustice and irreparable

damage or injury before the application for the writ of

preliminary injunction could be heard on notice, the

issuance of a Temporary Restraining Order is proper.

PRAYER

WHEREFORE, premises considered, it is respectfully

prayed of this Honorable Court that:

15
1) Due to the extreme urgency of the matter involved, a

20-day Temporary Restraining Order be issued upon the

filing of this Complaint to restrain Defendant

Development Bank of the Philippines, their assigns

and/or successors-in-interest and all persons acting

under them from unlawfully disposing and possessing

any portion of the Property, and from unlawfully

representing themselves as true and lawful owners of

the Property;

2) The 20-day Temporary Restraining Order be converted

to a Preliminary Injunction and after further hearing, to

make the Injunction PERMANENT;

3) After trial on the merits, the foreclosure proceedings

and the Certificate of Sale involving the Property be

declared null and void;

4) Transfer Certificate of Title No. T-398938 in the name of

Development Bank of the Philippines be declared null

and void and cancelled and Transfer Certificate of Title

No. T-48796 in the name of Josefa Bartolome Gacula,

married to Eduardo P. Gacula, be reinstated;

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5) Defendant Development Bank of the Philippines be

directed to render proper and true accounting of

Plaintiff’s obligation;

6) Defendant Development Bank of the Philippines be

directed to pay Plaintiffs actual damages in the amount

of P100,000.00, moral damages in the amount of

P50,000.00, exemplary damages in the amount of P

50,000.00, attorney’s fees in the amount of P50,000.00

and the costs of this suit.

Plaintiffs also pray for other just and equitable reliefs.

Cainta, Rizal for Cauayan City.

October 1, 2012

BASILIO C. ALMAZAN, JR.

Counsel for the Plaintiffs
No. 17 Tyler St., Filinvest East
Cainta, Rizal
PTR No. A-1453982, Jan. 10, 2012, Taguig City
IBP Lifetime No. 06320, Jan. 10, 2007, Isabela
Roll No. 42543
Admitted to the Bar in 1997
MCLE Compliance No. III-0014328
Issued on April 26, 2010

17
 VERIFICATION AND CERTIFICATION

We, Sps. Eduardo P. Gacula and Josefa Bartolome

Gacula, after having been duly sworn to in accordance with
law, hereby depose and state that:

1) We are the Plaintiffs in this case.

2) We have caused the preparation of the foregoing

Complaint; we have read the same and the allegations
therein are true and correct of our own personal
knowledge or based on authentic records.

3) We certify that we have not commenced any other

action or proceedings involving the same issues in the
Supreme Court, Court of Appeals or any tribunal and
agency; that to the best of our knowledge no such
action or proceeding is pending in the Supreme Court,

18
 Court of Appeals or divisions thereof or any tribunal or
agency; if there is such other pending action or claim a
complete statement of the present status thereof shall
be made; if we should learn that a similar action or
proceeding has been filed or is pending before the
Supreme Court, Court of Appeals or divisions thereof or
any tribunal or agency, we undertake to promptly
inform aforesaid Court or tribunal and agency of the
fact within five (5) days therefrom to this Court.

Eduardo P. Gacula Josefa Bartolome Gacula

SUBSCRIBED AND SWORN to before me, this __ th day of

October 2012, affiants exhibiting to me their Government IDs
as follows:
Governemnt ID No.
Eduardo P. Gacula
Josefa Bartolome Gacula

Doc. No. __
Page No. __
Book No.__
Series of 2012

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